The benchmark indices extended gains after recovering early losses on Monday as selling pressure in IT shares - Tata Consultancy Services, Infosys and HCL Technologies - was countered by buying interest in Reliance Industries, Tata Motors, Kotak Mahindra Bank, HDFC Bank and HDFC. The Sensex recovered over 500 points from the day's lowest level and Nifty 50 index moved above its important psychological level of 18,000 for the first time.
As of 10:53 am, the Sensex was up 245 points at 60,304 and Nifty 50 index advanced 92 points to 17,988.
Meanwhile, Asian shares rallied on Monday due to gains in China, while rising Treasury yields lifted the dollar to a near-three-year peak against the Japanese yen.
Nasdaq futures and S&P 500 futures were both down around 0.1 per cent, but well above early lows. EUROSTOXX 50 futures dipped 0.1 per cent and FTSE futures held steady.
Back home, thirteen of 15 sector gauges compiled by the National Stock Exchange were trading higher, led by the Nifty Auto index's over 2 per cent gain. Nifty Bank, Financial Services, Metal, Private Bank, Consumer Durables and Oil & Gas indexes also rose between 0.6-1 per cent.
On the other hand, IT index was top sectoral loser, the index fell over 3 per cent dragged by losses in TCS, Infosys, HCL Technologies, Tech Mahindra and Wipro.
Tata Motors was top Nifty gainer; the stock rose over 6 per cent to fresh 52-week high of Rs 407.45 after the company said that In line with July guidance, Q2 FY22 wholesales totaled 64,032 units (excluding the China JV), down 12.8 per cent year-on year.
Coal India advanced 3 per cent to Rs 194 on reports of shortage of coal in the country.
Reliance Industries rose after the country's most valuable company on Sunday announced two deals to buy solar capacities. Through its unit Reliance New Energy Solar Ltd (RNESL), Reliance is buying Norwegian-headquartered solar panel maker REC Solar Holdings for $771 million from China National Bluestar (Group) and an up to 40 per cent stake in Sterling and Wilson Solar.
Maruti Suzuki, NTPC, Kotak Mahindra Bank, Eicher Motors, Power Grid, Hindalco, ONGC, UPL and Mahindra & Mahindra were also among the gainers.
On the flipside, TCS was top Nifty loser, the stock fell nearly 6 per cent to Rs 3,712. Wipro, Tech Mahindra, HCL Tech, Infosys, Bharti Airtel and HDFC Life were also among the notable losers.
The overall market breadth was positive as 1,980 shares were advancing while 886 were declining on the BSE.